Justia Corporate Compliance Opinion Summaries

Texas Wyoming Drilling, Inc. (TWD) filed a voluntary petition for bankruptcy under Chapter 11 and filed its disclosure statement and plan, which eliminated all of TWD's shareholders' stock interests in TWD. Central to this dispute were the terms of the plan and statement; namely, whether the terms preserved TWD's claims against Laguna Madre Oil & Gas II, LLC et al. A few months after confirmation of the plan, TWD sued 32 of its former shareholders, including appellants here, for pre-petition dividend payments that were allegedly fraudulent transfers under 11 U.S.C. 544, 548, and 550, and the Texas Business and Commerce Code, alleging that the former shareholders had received dividends and other transfers equaling millions of dollars while TWD was insolvent (Avoidance Actions). Laguna subsequently appealed the bankruptcy court's denial of its motion for summary judgment. The court held that the bankruptcy court properly denied Laguna's motion for summary judgment because the plan adequately preserved the Avoidance Actions and the claims were not barred by judicial estoppel or res judicata. Accordingly, the court affirmed the judgment. View "Spicer v. Laguna Madre Oil & Gas II LLC, et al." on Justia Law

Viasystems, Inc., a Missouri-based corporation, filed suit against EBM-Papst St. Georgen GmbH & Co., KG (St. Georgen), a German corporation, alleging several claims in contract and tort. At issue was whether the district court properly concluded that it had neither specific nor general personal jurisdiction over St. Georgen and granted its motion to dismiss. The court held that Viasystems failed to establish a prima facie case that specific and general jurisdiction could be asserted over St. Georgen. The court also held that the district court did not abuse its discretion in denying Viasystems' motion for jurisdictional discovery. Therefore, because St. Georgen did not have sufficient "minimum contacts" with Missouri, the maintenance of the suit would offend "traditional notions of fair play and substantial justice." Accordingly, the court affirmed the dismissal of the case. View "Viasystems, Inc. v. EBM-Papst St. Georgen" on Justia Law

This appeal arose out of a contest for control of Trans-Resources, Inc., a Delaware corporation, where plaintiffs brought a Court of Chancery action under 8 Del. C. 225 against defendant to determine which stockholder group possessed the majority voting interest entitled to elect the Trans-Resources board of directors. The court affirmed the judgment of the Court of Chancery in so far as it embodied and implemented the rulings in the Merits and Spoliation Opinions; and reversed to the extent it adjudicated the beneficial ownership of the Orly Trust Shares and the Genger Shares based on the determinations made in its August 9, 2010 Side Letter Opinion and August 18, 2010 Final Judgment Order. View "Genger v. TR Investors, LLC, et al." on Justia Law

This case stemmed from the transportation excise tax that National Airlines (National) owed the government. Plaintiff appealed the district court's summary judgment determination that, pursuant to 26 U.S.C. 6672, he was personally liable for the excise taxes that National collected from its passengers but failed to pay over to the United States during his tenure as National's CEO. The court affirmed the judgment of the district court and held that the district court properly found that plaintiff was a "responsible person" and that his failure to pay taxes was willful as defined by this circuit's precedents. View "Conway v. United States" on Justia Law

The SEC brought a civil action against defendant alleging that, as an outside director of Engineered Support Systems, Inc. (ESSI), he violated numerous federal securities laws by participating in the grant of backdated, "in-the-money" stock options to ESSI officials including his father. At issue was the district court's grant of defendant's Fed. R. Civ. Pro. 50(a)(1) motion for judgment as a matter of law. The court agreed with the district court's conclusion that the SEC had failed to prove the requisite elements of scienter and negligence. The court also held that there was no clear abuse of discretion in excluding any reference to the Incentive Stock Option Agreement between defendant's father and ESSI. Accordingly, the court affirmed the judgment of the district court.View "Sec. and Exch. Comm'n v. Shanahan, Jr." on Justia Law

This case stemmed from a contractual arrangement known as a "cash-settled total return equity swap agreement" between the parties. The parties appealed the judgment of the district court finding defendants in violation of section 13(d) of the Williams Act, 15 U.S.C. 78m(d), and permanently enjoining them from future violations. The court considered only whether a section 13(d) violation occurred with respect to CSX shares owned outright by defendants acting as a group. Because the district court did not make findings sufficient to permit appellate review of a group violation of section 13(d) with respect to outright ownership of CSX shares, the court remanded for further consideration. An earlier order affirmed the denial of an injunction against the voting of shares acquired by defendants while they were not in compliance with section 13(d). The court explained that ruling on the ground that injunctive "sterilization" of shares was not available when shareholders had adequate time to consider the belated Williams Act disclosures before the relevant shareholder's vote. Accordingly, the court affirmed in part, vacated in part, and remanded in part. View "CSX Corp. v. The Children's Inv. Fund Mgmt., et al." on Justia Law

This action arose from a technology-sharing relationship between plaintiffs and defendant where plaintiffs brought suit against defendant in January 2009 for, among other things, breach of contract based on defendant's alleged failure to perform its end of a bargain the parties had struck. Both parties filed cross motions for summary judgment. Having considered the parties' extensive submissions and their presentations at the argument held on March 1, 2011, the court decided to deny both motions because numerous issues of material fact remained in dispute. Nonetheless, the court made several summary judgment findings pursuant to Federal Rule of Civil Procedure 56(d) regarding certain discrete issues where the facts were without substantial controversy. View "Petroplast Petrofisa Plasticos S.A. v. Ameron Int'l Corp." on Justia Law

Plaintiff appealed from a judgment granting defendant's motion to dismiss as untimely plaintiff's complaint, which alleged breach of fiduciary duty, intentional misrepresentation, negligent misrepresentation, and conspiracy to commit those three offenses. At issue was whether the district court properly ruled that tolling of the untimely claims, on the basis of defendant's continuing concealment, was unwarranted. The court affirmed and held that the lawsuit, commenced on April 2004, arose from an injury suffered no later than June 2000 and therefore, was barred by the applicable statute of repose, Conn. Gen. Stat. 52-577. The court also held that plaintiff could not seek the safe harbor of equitable estoppel due to its failure to recognize that it was required to pursue its action. Accordingly, the court affirmed the judgment of the district. View "International Strategies Group v. Ness" on Justia Law

Plaintiffs, former shareholders and the representative and attorney-in-fact for all shareholders of Kinexus Corporation (Kinexus), commenced this action asserting claims against Advent Software, Inc. (Advent) for breach of contract and unjust enrichment arising out of a December 31, 2001 agreement entered into by Advent to acquire Kinexus. Advent subsequently moved to dismiss the action because of Kinexus' failure to prosecute and Advent argued that dismissal with prejudice was appropriate under Court of Chancery Rules 41(b) and 41(e). The court held that Advent's motion to dismiss for failure to prosecute was denied where the court was not convinced that these circumstances necessitated dismissal because of the court's preference for resolving cases on the merits and because Kinexus appeared to have renewed their efforts to diligently prosecute the matter. Accordingly, counsel were requested to confer and to promptly submit a case scheduling order so that discovery could be completed and a trial date could be established. View "Kinexus Representative LLC v. Advent Software, Inc." on Justia Law

This case arose when Del Monte Foods Company announced that it had agreed to be acquired by a consortium of Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners, and Centerview Partners (collectively, Sponsors). A number of familiar entrepreneurial plaintiffs' firms filed putative class actions challenging the merger. Plaintiffs subsequently sought an interim award of attorneys' fees and expenses for causing defendants to issue supplemental disclosures and obtaining a preliminary injunction. The court held that the application for an interim fee award was granted with respect to benefits conferred by the Proxy Supplement. For those benefits, Lead Counsel was awarded fees and expenses of $2.75 million. Therefore, the court held that the application was otherwise denied without prejudice and could be renewed at a later time. View "In re Del Monte Foods Co. Shareholders Litigation" on Justia Law